Economy and regional politics

EDITORIAL:Daily Times
In the run up to the withdrawal of US/NATO forces from Afghanistan, the meeting between the foreign ministers (FMs) of Pakistan and Russia gains significance as the two regional players through enhanced bilateral relations are seeking to expand and diversify their cooperation in the fields of trade, investment, energy and agriculture. Their efforts aim at their increased role in the region full of great economic prospects considering the richness of the largely untapped resources of this region. For this purpose, Pakistan is striving hard to get full membership of the Shanghai Cooperation Organisation (SCO) comprising China, Russia and Central Asian countries. During the visit, the two leaders discussed several concrete proposals including oil exploration, hydropower production/distribution and coal-based power generation projects. Russia also expressed its willingness to participate in trans-regional energy projects, namely TAPI and CASA-1000 and its interest in Thar coal exploitation. The finalisation process of the proposed memorandum of understanding (MoU) on Expansion and Modernisation of Pakistan Steel Mills (PSM) also came under discussion.

The opportunity opening up is promising as Pakistan being an energy-starved country is in dire need of such help and if they come from within the region, nothing seems more feasible. The Russian offers need to be taken seriously as the IP gas project is threatened by growing US economic sanctions and military pressure on Iran. However, the materialisation of Pak-Russia cooperation is related to the establishment of peace and stability in Afghanistan as the future gas project of TAPI and electricity transmission project of CASA-1000 is dependent on a secure Afghanistan. However, Russian investment interest in the Thar Coal Project seems feasible given Pakistan’s dire energy needs amid a funds shortage crisis. Russia’s cooperation in building the PSM has been an exemplary venture the two countries took on decades ago. It is heartening that the much-needed expansion and modernisation in the PSM with the help of Russia has finally been given serious thought. Due to the mismanagement of its affairs and criminal delay in its upgrading, the facility is now literally in the doldrums, proving a burden on the national exchequer as a white elephant.

The two leaders also deliberated on the region’s security situation. Pakistan’s FM Ms Hina Rabbani Khar reiterated her country’s policy to fully support an Afghan-driven peace initiative, which is appreciable but requires fair play in this regard. If the security situation degrades in Afghanistan post-2014, efforts to amplify economic cooperation among regional powers would massively suffer, efforts that are the best approach to fill the power vacuum that is going to be created soon by the pullout of the US from Afghanistan. A stronger and more closely knit region of South Asia and Central Asia with China and Russia on economic grounds is important for the region’s stability and prosperity. Such economic partnerships would not only change Pakistan’s image of a US client state but also serve Russia’s interests, which is keen on having an improved security situation in the region to create a powerful regional bloc against the US, already eying the benefits of exploiting the resources of the Central Asian states by offering huge investment in the TAPI gas project and proposing building of a New Silk Route. Russia’s focus on enhancing economic partnership with Pakistan is due to Pakistan’s geostrategic location, which promises further economic prospects to Russia through ports in Karachi and Gwadar. It is time that Pakistan focuses more on increasing the economic benefits from Russian’s offers to help overcome its energy crisis, a prerequisite for improving our sliding economy.